THE British way of life has to change, Prime Minister David Cameron will warn today as he prepares to make the biggest cuts in government spending since World War II.
Cameron will deliver his outlook on the economy in a major speech today, warning that the proposed cuts will be felt by each and every Briton and the effects could last for decades, such is the scale of the debt problem.
The PM will argue the government needs to tackle Britain’s debt now, saying the problem is “even worse than we thought” and the implications could be “more critical than we feared”.
The coalition Government plans to hold public meetings and online forums to consult people about their priorities before finalising its plan to reduce government spending, likely in November.
The Government needs to take the country with it as it begins to tackle the £156 billion ($A273.68bn) deficit, Mr Cameron will say as he hopes the public consultations will minimise the prospect of strikes over cuts to benefits and jobs.
Mr Cameron will argue that a failure to act now would mean higher interest rates, raised mortgages and higher unemployment.
The PM’s comments come as ministers prepare the ground for the emergency budget on June 22, when Chancellor George Osborne will attempt to make serious inroads into the annual deficit.
Mr Osborne and Danny Alexander, the new chief secretary to the treasury, will tomorrow publish the principles underpinning both the budget and the spending review which will come later in the year.
The government is desperate to persuade people of the need for what it calls the “difficult decisions” it is set to take and will hold a public consultation on its plans.
“How we deal with these things will affect our economy, our society – indeed our whole way of life,” he will say.
“The decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades to come.
“It is precisely because these decisions are so momentous, because they will have such enormous implications, and because we cannot afford either to duck them or to get them wrong that I want to make sure we go about the urgent task of cutting our deficit in a way that is open, responsible and fair,” he said.
“I want this government to carry out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country.
“I have said before that as we deal with the debt crisis we must take the whole country with us – and I mean it.
“George Osborne has said that our plans to cut the deficit must be based on the belief that we are all in this together – and he means it.”
Cameron suggested at the weekend that high welfare and public sector pay bills were high on the government’s list for cuts.
Child tax credits for better-off families are expected to be curbed.
Capital gains tax is likely to rise, although there is speculation that there could be generous exemptions for certain groups of people, including entrepreneurs and pensioners, after
opposition from Tory right-wingers.
Ministers have steadfastly refused to rule out a rise in VAT, from its current level of 17.5 per cent.
However, the government wants the bulk of its savings to be made by reducing current expenditure rather than raising taxes.
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